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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5198 OF 2008

Singh Ram (D) Thr. L.Rs. ...   Appellant (s)

Versus

Sheo Ram & Ors.      ...   Respondent (s)

With

Civil Appeal No. 7941 of 2014 @ S.L.P.(C) No. 26861  of 2008, Civil Appeal No. 1113 of 2009, Civil Appeal  No. 7942  of 2014 @ S.L.P.(C) No. 2097 of 2009, Civil  Appeal No. 7943  of 2014 @ S.L.P.(C) No. 6355 of  2009 Civil Appeal No. 5562 of 2009, Civil Appeal No.  7944  of 2014 @ S.L.P.(C) No. 22604 of 2009, Civil  Appeal No. 7947  of 2014 @ S.L.P.(C) No. 23963 of  2009, Civil  Appeal No. 8551 of 2009, Civil  Appeal  No. 7948  of 2014 @ S.L.P.(C) No. 25422 of 2011,  Civil Appeal No. 7951  of 2014 @ S.L.P.(C) No. 34380  of 2011, Civil Appeal No. 7953  of 2014 @ S.L.P.(C)  No. 1274 of 2012, Civil Appeal No. 7954  of 2014 @  S.L.P.(C) No. 1275 of 2012, Civil Appeal No. 5256 of  2012, Civil Appeal No.  7955  of 2014 @ S.L.P.(C) No.  19048 of 2012, Civil Appeal No. 7956-58  of 2014 @  S.L.P.(C)  Nos.  772-774  of  2013,  Civil  Appeal  No.  7959  of  2014 @ S.L.P.(C)  No.5790 of  2013,  Civil  Appeal No. 9616 of 2010, Civil Appeal No. 6014 of  2014, Civil  Appeal No. 5727 of 2011, Civil  Appeal  No. 8132 of 2011 and Civil Appeal No. 7573 of 2009

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J U D G M E N T

Adarsh Kumar Goel, J.

1. Leave granted in SLPs.

2. These  matters  have  been  put  up  before  this  Bench  in  

pursuance  of  the  order  passed  by  a  Bench  of  two  Judges  on  

18.08.2008, as under:-

“As it appears that observations made by this Court   in  Prabhakaran & Ors.  vs.  M. Azhagiri Pillai &  Ors., reported in 2006 (4) SCC 484, in regard to the   interpretation and/or application of Article 61 of the   Schedule appended to the Limitation Act, 1963 are   contrary to the principles laid down by this Court in   a large number  of  decisions,  including  Jayasingh  Dhyanu Mhoprekar & Anr.  vs.  Krishna Babaji  Patil  & Anr.,  [1985 (4) SCC 162] as also various  decisions referred to by the Full Bench of the High   Court, we are of the opinion that the matter should   be heard by a larger Bench.”

Before adverting to the question of reconciling conflicting opinions  

in various decisions, including the two decisions referred to above,  

we  consider  it  appropriate  to  mention  that  by  the  impugned  

judgment, the Full Bench of the High Court of Punjab and Haryana  

at Chandigarh, considered the question "whether there is any time  

limit for usufructuary mortgagor to seek redemption?” and decided

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the  said  question  in  the  negative,  in  favour  of  the  respondent-

mortgagor as follows:-

“Therefore, we answer the questions framed to hold   that  in  case  of  usufructuary  mortgage,  where  no   time limit is fixed to seek redemption, the right to   seek  redemption  would  not  arise  on  the  date  of   mortgage  but  will  arise  on  the  date  when  the   mortgagor  pays  or  tenders  to  the  mortgagee  or   deposits  in  Court,  the  mortgage  money  or  the   balance  thereof.   Thus,  it  is  held  that  once  a   mortgage  always  a  mortgage  and  is  always   redeemable.”

The  correctness  of  the  above  view  is  the  subject  matter  of  

consideration before this Court.

3. The  predecessor  of  the  respondents  mortgaged  the  suit  

property on 11.08.1903 to the predecessor of the appellants for a  

sum of Rs.80/-.  The appellant-plaintiffs filed a suit for declaration  

that the suit land having not been redeemed for a period of more  

than  60  years,  the  defendants  lost  all  rights,  title  and  interest  

therein and the appellants became the owners by prescription.   

4. The trial  Court  considered the matter  under Issue No.2 and  

held  that  limitation  starts  running  from  the  date  when  the  

mortgagee  demands  the  money  and  the  mortgagor  refused  the  

same.    Discussion on the said issue is as follows:-

“There is merit in the second contention made on   behalf of the defendants.  It is case of usufructuary   mortgage and in case of usufructuary mortgage and

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no period for the payment of mortgage amount was   fixed.   It  is not the case of the plaintiffs  that the   plaintiffs  ever  made  demand  for  the  mortgage   amount  and  they  refused.   In  this  situation,  no   cause of action could accrue to the plaintiffs, which   could  only  accrue  on  demand  of  the  mortgage  amount from the defendants and refusal of same by   the defendants.  This view also finds support from  the decision in the case of Nilkanth Balwant Natu &   Ors. vs. Vidya Narasinh Bharathi Swami & Ors. AIR   1930 PC 188). The law laid down in several cases referred to by   the learned counsel for the plaintiffs relating to the   interpretation of provisions of Section 28 and Article   148 of  the Limitation Act,  does  not  apply  on the   facts  of  the  instant  case  at  all  as  the  periods  of   limitation is to run from the date on which the cause   of  action  arises.   In  the  result,  I  hold  that  the   plaintiffs have not become owners of the suit land   on  the  expiry  of  period  of  more  than  60  years.   Issue No.1 is thus decided in favour of the plaintiffs   and  against  the  defendants,  and  Issue  No.2  is   decided  against  the  plaintiffs  and  in  favour  of   defendants.”  

The above view was affirmed by the appellate Court as follows:-

“I find force in the contention of the learned counsel   for the respondents.  The present one is a case of   usufructuary  mortgage  and  in  case  of  such  a   mortgage no period of payment is fixed.  A reading   of the mortgage deed would show that no time had   been fixed.  The plaintiffs had nowhere pleaded that   they ever made demand for the mortgage amount   and it  was refused.   In  such a situation,  the trial   Court was right in coming to the conclusion that no   cause of action could accrue to the plaintiffs which   could  only  accrue  on  demand  of  the  mortgage  amount from the defendants and the refusal of the   same by them.  Reliance was rightly placed by the   trial court on Nilkanth Balwant Natu & Ors. vs. Vidya   Narasingh Bhorathiswami & Ors., AIR 1930 PC 188.   No contrary view law has been cited to persuade

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me to take a contrary view.”

5. On second appeal by the plaintiffs before the High Court, the  

matter was directed to be placed before the Full Bench to consider  

the following questions:-  

“1.  Whether the right to seek redemption would   arise  on  the  date  of  mortgage itself  in  case  of   usufructuary mortgage when no time limit is fixed   to seek redemption? 2.  Whether there is any time limit in the case of a   usufructuary  mortgagor  to  get  his  property   redeemed?”

6. The Full  Bench held  that  in  case  of  usufructuary  mortgage,  limitation  for  recovery  of  possession  under  Article  61  of  the  Limitation Act starts on payment of mortgage money as provided  under Section 62 of the Transfer of Property Act (for short ‘the T.P.  Act’)  and not from the date of mortgage.  Relevant observations  are:-

“After  considering  the  aforesaid  judgments,  we  respectfully agree with  the view of the Full Bench  of this Court in  Lachhman Singh’s case (supra)  and that of Patna High Court in Jadubans Sahai’s  case (Supra).   The provisions of Sections 60, 62   and  67  of  the  Transfer  of  Property  Act  are  not   applicable  within  the  jurisdiction  of  this  Court.   Therefore,  these  provisions  are  required  to  be   interpreted keeping in view the principles of equity   and  good  conscience.   Since  the  mortgage  is   essentially and basically a conveyance in law or an   assignment  of  chattels  as  a  security  for  the   payment  of  debt  or  for  discharge  of  some  other   obligations for which it is given, the security must,   therefore,  be  redeemable  on  the  payment  or  

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discharge of such debt or  obligation.   That is  the   view of the Hon’ble Supreme Court in Pomal Kanji  Govindji’s case (supra) wherein it has also been  held that poverty should not be unduly permitted to   curtail one’s right to borrow money.  Since at one  point  of  time the mortgagor  for  one or  the other   reason  mortgaged  his  property  to  avail  financial   assistance  on  account  of  necessities  of  life,  the   mortgagor’s  right  cannot  be  permitted  to  be  defeated only on account of passage of time.  The   interpretation sought to be raised by the mortgagee  is to defeat the right of the mortgagor and is wholly   inequitable and unjust.  The mortgagee remains in   possession of the mortgaged property; enjoys the   usufruct thereof and, therefore, not to lose anything  by  returning  the  security  on  receipt  of  mortgage   debt.

Section 60 of the Act is general in nature applicable   to  all  kinds  of  mortgages  including  usufructuary   mortgage  which  is  evident  from  clause  (b)  of   Section  60  of  the  Act,  where  the  mortgagee  in   possession of the mortgaged property is required to   deliver possession to the mortgagor.  But Section 62   of the Act is a special  provision dealing only with   the rights of usufructuary mortgagor.   In terms of   clause(a)  of  Section 62 of  the Act,  the suit  is  for   possession after the mortgage comes to an end by   self  redeeming  process  as  the  mortgagee  is   authorised to pay himself the mortgage money from  the  rents  and  profits  of  the  property.   The  mortgagee has to look to the rents and profits only   to repay himself and when his entire charge is so   liquidated  he  must  re-deliver  possession  of  the   mortgaged property to the mortgagor.  However, in   terms of clause(b) of Section 62 of the Act, the right   of  the  mortgagor  will  arise  only  after  rents  and   profits derived by the mortgagee out of the usufruct   of the mortgaged property are adjusted towards the   interest or the principal and on mortgagor paying  the  balance  in  the  manner  prescribed.   In  such  mortgages,  rents  and  profits  are  to  be  set  off   against  interest  and the  mortgagee  is  entitled  to   retain possession until such time as the mortgagor  

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chooses to redeem on payment of the principal sum  secured.  Such right for possession will accrue after   the mortgage money is paid off.

The limitation of 30 years under Article 61(a) begins   to run “when the right to redeem or the possession   accrues”.   The  right  to  redemption  or  recover   possession accrues to the mortgagor on payment of   sum  secured  in  case  of  usufructuary  mortgage,   where rents  and profits  are to  be set  off  against   interest  on  the  mortgage  debt,  on  payment  or   tender to the mortgagee, the mortgage money or   balance thereof or deposit in the court.  The right to   seek foreclosure  is  co-extensive  with  the  right  to   seek redemption.  Since right to seek redemption   accrues only on payment of the mortgage money or   the balance thereof after adjustment of rents and   profits from the interest thereof, therefore, right of   foreclosure  will  not  accrue  to  the  mortgagee  till   such time the mortgagee remains in possession of   the  mortgaged  security  and  is  appropriating   usufruct of the mortgaged land towards the interest   on  the  mortgaged  debt.   Thus,  the  period  of   redemption or possession would not start till  such   time  usufruct  of  the  land  the  profits  are  being   adjusted towards interest on the mortgage amount.   In view of the said interpretation, the principle that   once a mortgage, always a mortgage and, therefore   always redeemable would be applicable.

The  argument  that  after  the  expiry  of  period  of   limitation  to  sue  for  foreclosure,  the  mortgagees   have a right to seek declaration in respect of their   title over the suit property is not correct.  From the   aforesaid  discussion,  it  is  apparent  that  the   mortgage cannot be extinguished by any unilateral   act of the mortgagee.  Since the mortgage cannot  

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be  unilaterally  terminated,  therefore,  the  declaration  claimed  is  nothing  but  a  suit  for   foreclosure.  It is equally well settled that it is not   title of the suit, which determines the nature of the   suit.   The  nature  of  the  suit  is  required  to  be   determined  by  reading  all  the  averments  in  the   plaint.  Such declaration cannot be claimed by an   usufructuary mortgagee.   

Thus,  we  prefer  to  follow  the  dictum of  law  laid   down by the larger Bench in  Seth Ganga Dhar’s  case(supra) as  well  as  judgments  of  Hon’ble   Supreme Court in Jaysingh Dnyanu Mhoprekar’s  case(supra),  Pomal  Kanji  Govindji’s  case(supra),  Panchannan  Sharma’s  case(supra)  and  Harbans’s  case(supra) in  preference  to  the  judgments  relied  upon  by  the   mortgagees  in  Prabhakaran’s  case(supra)  and  Sampuran Singh’s case (supra).”

7. We have heard learned counsel for the parties.   

8. The main contention urged on behalf of the appellants is that  

the right of mortgagor to redeem is governed by Article 61 of the  

Schedule to the Limitation Act and the right to redeem or recover  

possession  accrues on  the date of  the  mortgage itself,  unless  a  

different time is agreed between the parties.  Since the mortgagor  

has right to redeem on payment of the mortgage money and there  

can be no restriction on the mortgagor to exercise his right on the  

date of mortgage itself,  period of limitation starts on the date of  

mortgage and on expiry thereof, right to recover possession comes  

to an end. The expiry of limitation not only bars the remedy but also

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the right to seek possession as provided under Section 27 of the  

Limitation Act.  It  is  submitted that  this  Court  has  dealt  with  the  

issue in  Sampuran Singh & Ors.  vs. Niranjan Kaur (smt.) &  

Ors., (1999) 2 SCC 679.  There is no occasion to reconsider the said  

view.  Reliance is also placed on a Full Bench decision of the High  

Court of Himachal Pradesh in Bhandaru Ram (D) Thr. L.R. Ratan  

Lal vs.  Sukh Ram, AIR 2012 (H.P.) 1 (FB) wherein the impugned  

judgment of the Full Bench of the Punjab and Haryana High Court  

has been expressly dissented from and it has been concluded that  

the period of limitation for filing a suit for recovery of possession of  

immovable property or redemption of usufructuary mortgage, which  

have not fixed any time for  repayment of mortgage money, is 30  

years from the date of mortgage, as prescribed under Article 61 of  

the Schedule to the Limitation Act, 1963 (60 years under Article 148  

as per Indian Limitation Act, 1908).   

9. Learned counsel for the respondents support the view taken by  

the  High  Court  and  submit  that  the  usufructuary  mortgage  was  

different from any other mortgage and the person, who parts with  

possession  of  his  property  from  rents  and  profits  of  which  the  

mortgagee was entitled to recover the mortgage money, could not  

be placed at par with a mortgagor who had not given possession of  

the property to mortgagee and allowed the usufruct of the property

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to  be  used  for  payment  of  mortgage  money.   In  such  cases,  

limitation could not run from the date of mortgage but from the  

date  mortgage  money  is  paid  out  of  rents  and  profits  of  the  

property to the knowledge of the mortgagor or from the date of  

payment or deposit by the mortgagor.  Mere expiry of time from the  

date of mortgage could not extinguish the right of redemption and  

to recover possession.

10. We have given our anxious consideration to the question of  

law arising in the cases.

11. We are  in  agreement  with  the  view taken in  the  impugned  

judgment  that  in  a  usufructuary  mortgage,  right  to  recover  

possession  continues  till  the  money  is  paid  from  the  rents  and  

profits or where it is partly paid out of rents and profits when the  

balance is paid by the mortgagor or deposited in Court as provided  

under Section 62 of the T.P. Act.   

12. It will be appropriate to refer to the statutory provisions of the  

T.P. Act and the Limitation Act:-   

“T.P. Act

58.  "Mortgage",  "mortgagor",  "mortgagee",  "mortgage-money" and "mortgaged" defined.

(a)  A  mortgage  is  the  transfer  of  an  interest  in   specific  immoveable  property  for  the  purpose  of   securing the payment of money advanced or to be   advanced by way of loan, an existing or future debt,  

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or the performance of an engagement which may   give rise to a pecuniary liability.

The transferor is called a mortgagor, the transferee   a mortgagee; the principal  money and interest of   which payment is  secured for  the time being are   called the mortgage-money, and the instrument (if   any)  by which the transfer  is  effected is  called a   mortgage-deed.

(b) Simple  mortgage-Where,  without  delivering  possession  of  the  mortgaged  property,  the   mortgagor  binds  himself  personally  to  pay  the   mortgage-money,  and  agrees,  expressly  or   impliedly,  that,  in  the  event  of  his  failing  to  pay   according to his contract, the mortgagee shall have   a right to cause the mortgaged property to be sold   and the proceeds of sale to be applied, so far as   may  be  necessary,  in  payment  of  the  mortgage- money, the transaction is called a simple mortgage   and the mortgagee a simple mortgagee.

(c) Mortgage  by  conditional  sale-Where,  the  mortgagor ostensibly sells the mortgaged property-

on  condition  that  on  default  of  payment  of  the   mortgage-money on a  certain  date  the  sale  shall   become absolute, or

on condition that on such payment being made the   sale shall become void, or

on condition that on such payment being made the   buyer shall transfer the property to the seller,

the transaction is called a mortgage by conditional   sale and the mortgagee a mortgagee by conditional   sale:

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PROVIDED that  no  such  transaction  shall  be   deemed to be a mortgage, unless the condition is   embodied  in  the  document  which  effects  or   purports to effect the sale.

(d) Usufructuary  mortgage-Where  the  mortgagor   delivers  possession or  expressly or  by implication   binds  himself  to  deliver  possession  of  the   mortgaged  property  to  the  mortgagee,  and  authorizes  him  to  retain  such  possession  until   payment  of  the  mortgage-money,  and  to  receive  the rents and profits accruing from the property or   any  part  of  such  rents  and  profits  and  to   appropriate  the  same  in  lieu  of  interest  or  in   payment of the mortgage-money, or partly in lieu of   interest  or  partly  in  payment  of  the  mortgage- money,  the  transaction  is  called  a  usufructuary   mortgage  and  the  mortgagee  a  usufructuary   mortgagee.

(e) English  mortgage-Where  the  mortgagor  binds   himself to repay the mortgage-money on a certain   date,  and  transfers  the  mortgaged  property   absolutely  to  the  mortgagee,  but  subject  to  a   proviso that he will re-transfer it to the mortgagor   upon payment of the mortgage-money as agreed,   the transaction is called an English mortgage.

(f) Mortgage  by  deposit  of  title-deeds-Where  a   person in any of the following towns, namely, the   towns of Calcutta, Madras, and Bombay, and in any   other town which the State Government concerned   may, by notification in the Official Gazette, specify   in  this  behalf,  delivers  to  a  creditor  or  his  agent   documents  of  title  to  immovable  property,  with   intent to create a security thereon, the transaction   is called a mortgage by deposit of title-deeds.

(g) Anomalous mortgage-A mortgage which is not a   simple mortgage, a mortgage by conditional sale, a  

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usufructuary mortgage,  an English mortgage or  a   mortgage  by  deposit  of  title-deeds  within  the  meaning  of  this  section  is  called  an  anomalous   mortgage.

60. Right of mortgagor to redeem

At any time after the principal money has become  due,  the  mortgagor  has  a  right,  on  payment  or   tender, at a proper time and place, of the mortgage- money, to require the mortgagee (a) to deliver to   the  mortgagor  the  mortgage-deed  and  all   documents  relating  to  the  mortgaged  property   which  are  in  the  possession  or  power  of  the   mortgagee,  (b)  where  the  mortgagee  is  in   possession  of  the  mortgaged  property,  to  deliver   possession thereof to the mortgagor, and (c) at the   cost  of  the  mortgagor  either  to  re-transfer  the   mortgaged property to him or to such third person   as  he  may  direct,  or  to  execute  and  (where  the   mortgage  has  been  effected  by  a  registered   instrument) to have registered an acknowledgment   in writing that any right in derogation of his interest   transferred  to  the  mortgagee  has  been  extinguished:

Provided that the right conferred by this section has   not been extinguished by the act of the parties or   by decree of a court.  

xxx xxx xxx

62.  Right  of  usufructuary  mortgagor  to  recover possession

In  the  case  of  a  usufructuary  mortgage,  the  mortgagor has  a right to recover possession of  the property together with the mortgage-deed and  all  documents relating to the mortgaged property  

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which  are  in  the  possession  or  power  of  the   mortgagee,-

(a)  where  the  mortgagee  is  authorised  to  pay  himself  the  mortgage-money  from  the  rents  and   profits of the property,-when such money is paid;

(b)  where  the  mortgagee  is  authorised  to  pay   himself  from  such  rents  and  profits  or  any  part   thereof a part only of the mortgage-money, when  the term (if any) prescribed for the payment of the   mortgage-money  has  expired  and  the  mortgagor   pays  or  tenders  to  the  mortgagee  the  mortgage  money or the balance thereof or deposits it in court   hereinafter provided.

xxx xxx xxx Limitation Act:- Art. 61 By a mortgagor

a)  To  redeem  or  recover  possession  of  immovable  property  mortgaged b)  xxxxxxx

Thirty  years

xxxxxx

When the right to  redeem  or  to  recover  possession  accrues

xxxxxxxx          (emphasis supplied)

A perusal of above provisions shows that Article 61 refers to right to  

redeem or recover possession.  While right of mortgagor to redeem  

is  dealt  with  under  Section  60  of  the  T.P.  Act,  the  right  of  

usufructuary mortgagor to recover possession is specially dealt with  

under  Section 62.   Section 62 is  applicable  only  to  usufructuary  

mortgages  and  not  to  any  other  mortgage.   The  said  right  of

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usufructuary  mortgagor  though  styled  as  ‘right  to  recover  

possession’  is  for  all  purposes,  right  to  redeem  and  to  recover  

possession.   Thus,  while in case of any other mortgage,  right to  

redeem  is  covered  under  Section  60,  in  case  of  usufructuary  

mortgage, right to recover possession is dealt with under Section 62  

and  commences  on  payment  of  mortgage  money  out  of  the  

usufructs or partly out of the usufructs and partly on payment or  

deposit  by  the  mortgagor.   This  distinction  in  a  usufructuary  

mortgage  and  any  other  mortgage  is  clearly  borne  out  from  

provisions of Sections 58, 60 and 62 of the T.P. Act read with Article  

61 of the Schedule to the Limitation Act.  Usufructuary mortgage  

cannot be treated at par with any other mortgage, as doing so will  

defeat the scheme of Section 62 of the T.P. Act and the equity.  This  

right of the usufructuary mortgagor is not only an equitable right, it  

has statutory recognition under Section 62 of the T.P. Act. There is  

no  principle  of  law  on  which  this  right  can  be  defeated.   Any  

contrary view, which does not take into account the special right of  

usufructuary mortgagor under Section 62 of the T.P. Act, has to be  

held  to  be  erroneous  on  this  ground  or  has  to  be  limited  to  a  

mortgage  other  than  a  usufructuary  mortgage.   Accordingly,  we  

uphold the view taken by the Full Bench that in case of usufructuary  

mortgage,  mere expiry of a period of 30 years from the date of

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creation  of  the  mortgage  does  not  extinguish  the  right  of  the  

mortgagor under Section 62 of the T.P. Act.   

13. We may now refer to decisions of this Court.

(i) In Prabhakaran & Ors. vs. M. Azhagiri Pillai & Ors., (2006)  

4 SCC 484, suit of mortgagor for redemption was held to be within  

limitation.  However, in para 13, it was observed:-

“13. Article  148  of  the  Limitation  Act,  1908  (referred to as “the old Act”) provided a limitation of   60 years for a suit against a mortgagee to redeem  or  to  recover  possession  of  immovable  property   mortgaged.  The  corresponding  provision  in  the   Limitation  Act,  1963  (“the  new  Act”  or  “the  Limitation  Act”  for  short),  is  Article  61(a)  which   provides that the period of limitation for a suit by a   mortgagor to redeem or recover possession of the   immovable  property  mortgaged  is  30  years.  The   period of limitation begins to run when the right to   redeem or  to  recover  possession  accrues.  In  the   case of a usufructuary mortgage which does not fix   any date for repayment of the mortgage money, but   merely stipulates that the mortgagee is entitled to   be in possession till redemption, the right to redeem  would  accrue  immediately  on  execution  of  the   mortgage deed and the mortgagor has to file a suit   for redemption within 30 years from the date of the   mortgage. Section 27 of the Limitation Act provides   that  “at  the  determination  of  the  period  hereby   limited  to  any  person  for  instituting  a  suit  for   possession  of  any  property,  his  right  to  such   property shall  be extinguished”.  This  would mean  that  on  the  expiry  of  the  period  of  limitation   prescribed under the Act, the mortgagor would lose   his  right  to  redeem  and  the  mortgagee  would   become entitled to  continue in  possession as  the   full owner.”

The above observations do not take into account the special right of

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usufructuary mortgagor under Section 62 of the T.P. Act to recover  

possession which commences after mortgage money is paid out of  

rents and profits or partly out of rents and profits and  partly paid or  

deposited by mortgagor.  Thus, we are unable to accept the same  

as correct view in law.

(ii) In Jayasingh Dhyanu Mhoprekar & Anr. vs. Krishna Babaji  

Patil  &  Anr.,  1985  (4)  SCC  162,  the  question  of  limitation  for  

redemption was not  involved. Question was whether mortgagor’s  

right of redemption was affected when mortgaged land was allotted  

to mortgagees by way of grant under the provisions of  the Bombay  

Paragana  and  Kulkarni  Watans  (Abolition)  Act,  1950,  it  was  

observed:-

“6. The only question which arises for decision in   this case is whether by reason of the grant made in   favour of  the defendants the right  to  redeem the  mortgage  can  be  treated  as  having  become  extinguished.  It  is  well  settled  that  the  right  of   redemption under a mortgage deed can come to an   end  only  in  a  manner  known  to  law.  Such  extinguishment of right can take place by a contract   between the parties, by a merger or by a statutory   provision  which  debars  the  mortgagor  from  redeeming  the  mortgage.  A  mortgagee  who  has  entered into possession of the mortgaged property   under a mortgage will have to give up possession of   the property when the suit for redemption is filed   unless  he  is  able  to  show  that  the  right  of   redemption has come to an end or that the suit is   liable to be dismissed on some other valid ground.   This  flows  from  the  legal  principle  which  is   applicable  to  all  mortgages,  namely  “Once  a  

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mortgage, always a mortgage”. It is no doubt true   that the father of the first defendant and the second   defendant  have been granted occupancy right  by   the  Prant  Officer  by  his  order  dated  February  5,   1964 along with Pandu, the uncle of Defendant 1.   But it is not disputed that the defendants would not   have been able  to  secure  the  said  grant  in  their   favour  but  for  the  fact  that  they  were  in  actual   possession of  the lands.  They were able to  be in   possession of the one-half share of the plaintiffs in   the  lands  in  question  only  by  reason  of  the  mortgage  deed.  If  the  mortgagors  had  been  in   possession of the lands on the relevant date,  the   lands  would  have  automatically  been  granted  in   their favour, since the rights of the tenants in the   watan lands were allowed to subsist even after the   coming into  force  of  the  Act  and the  consequent   abolition of the watans by virtue of Section 8 of the   Act. The question is whether the position would be   different  because  they  had  mortgaged  land  with   possession on the relevant date.”

Apart from judgments mentioned in reference order, reference may  

be made to some other judgments dealing with the issue.   

(iii) In  Harbans  vs. Om Prakash,  (2006) 1 SCC 129, this Court  

upheld the view that limitation for redemption does not start from  

date of mortgage in a usufructuary mortgage and held that view in  

State of Punjab & Ors. vs.  Ram Rakha & Ors., (1997) 10 SCC  

172 was contrary to earlier view in Seth Gangadhar vs. Shankar  

Lal, 1959 SCR 509. It was observed:-

“7. Reference may be made to certain paragraphs   in Seth Ganga Dhar v. Shankar Lal, 1959 SCR 509  which read as follows:

“[4.] It is admitted that the case is governed by the   Transfer of Property Act. Under Section 60 of that  

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Act,  at  any  time  after  the  principal  money  has   become due, the mortgagor has a right on payment   or  tender  of  the  mortgage  money  to  require  the   mortgagee to reconvey the mortgaged property to   him. The right conferred by this section has been   called the right to redeem and the appellant sought   to enforce this right by his suit. Under this section,   however, that right can be exercised only after the   mortgage  money  has  become  due.  In  Bakhtawar   Begam v. Husaini Khanam,ILR (1914) 36 All 195 (IA  at p. 89) also the same view was expressed in these   words:

‘Ordinarily, and in the absence of a special condition   entitling the mortgagor to redeem during the term  for  which  the  mortgage  is  created,  the  right  of   redemption can only arise on the expiration of the   specified period.’ Now, in the present case the term of the mortgage   is  eighty-five  years  and  there  is  no  stipulation   entitling the mortgagor to redeem during that term.   That  term has  not  yet  expired.  The  respondents,   therefore,  contend that the suit  is  premature and   liable to be dismissed. * * * [6.]  The  rule  against  clogs  on  the  equity  of   redemption  is  that,  a  mortgage  shall  always  be   redeemable  and  a  mortgagor’s  right  to  redeem  shall neither be taken away nor be limited by any   contract between the parties. The principle behind   the rule was expressed by Lindley, M.R. In Santley v.   Wilde, (1899) 2 Ch. 474 in these words:

‘The principle is this: a mortgage is a conveyance of   land or an assignment of chattels as a security for   the  payment  of  a  debt  or  the discharge of  some   other obligation for which it is given. This is the idea   of a mortgage: and the security is redeemable on   the  payment  or  discharge  of  such  debt  or   obligation,  any  provision  to  the  contrary   notwithstanding. That, in my opinion, is the law. Any   provision  inserted  to  prevent  redemption  on  payment or performance of the debt or obligation  

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for which the security was given is what is meant by   a clog or fetter on the equity of redemption and is   therefore  void.  It  follows  from  this,  that  “once  a   mortgage always a mortgage”.’

[7.] The right of redemption, therefore, cannot be   taken away. The courts will ignore any contract the   effect of which is to deprive the mortgagor of his   right to redeem the mortgage. One thing, therefore,   is  clear,  namely,  that  the  term  in  the  mortgage   contract,  that  on  the  failure  of  the  mortgagor  to   redeem the mortgage within the specified period of   six months the mortgagor will have no claim over   the  mortgaged  property,  and  the  mortgage  deed  will be deemed to be a deed of sale in favour of the   mortgagee,  cannot  be  sustained.  It  plainly  takes   away altogether,  the mortgagor’s  right to redeem  the mortgage after the specified period. This is not   permissible,  for  ‘once  a  mortgage  always  a   mortgage’  and  therefore  always  redeemable.  The  same  result  also  follows  from  Section  60  of  the   Transfer  of  Property  Act.  So  it  was said  in  Mohd.   Sher Khan v. Seth Swami Dayal, AIR 1922 PC 17:

‘An  anomalous  mortgage  enabling  a  mortgagee  after  a  lapse  of  time  and  in  the  absence  of   redemption  to  enter  and  take  the  rents  in   satisfaction of the interest would be perfectly valid   if it did not also hinder an existing right to redeem.   But it is this that the present mortgage undoubtedly   purports to effect.  It  is expressly stated to be for   five years, and after that period the principal money   became  payable.  This,  under  Section  60  of  the  Transfer of Property Act, is the event on which the   mortgagor had a right on payment of the mortgage  money to redeem.

[14.]  In  comparatively  recent  times  Viscount   Haldane, L.C. repeated the same view when he said   in G. and C. Kreglinger v. New Patagonia Meat and  Cold Storage Co. Ltd, 1914 AC 25 (AC at pp. 35-36):

‘This jurisdiction was merely a special application of   a more general power to relieve against penalties  

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and to mould them into mere securities. The case of   the  common law mortgage of  land was indeed a   gross one. The land was conveyed to the creditor   upon  the  condition  that  if  the  money  he  had  advanced to the feoffor was repaid on a date and at   a place named, the fee simple would revest in the   latter, but that if the condition was not strictly and   literally  fulfilled  he  should  lose  the  land  forever.   What  made the hardship  on the debtor  a  glaring   one  was  that  the  debt  still  remained unpaid  and   could be recovered from the feoffor notwithstanding  that  he  had  actually  forfeited  the  land  to  the  mortgagee. Equity therefore, at an early date began   to relieve against what was virtually a penalty by   compelling the creditor  to  use his legal  title  as a   security.

My  Lords,  this  was  the  origin  of  the  jurisdiction   which we are now considering, and it is important to   bear that origin in mind. For the end to accomplish   which  the  jurisdiction  has  been  evolved  ought  to   govern and limit its exercise by equity judges. That   end has always been to ascertain, by parol evidence   if  need be,  the real  nature and substance of  the   transaction, and if it turned out to be in truth one of   mortgage simply, to place it on that footing. It was,   in  ordinary  cases,  only  where  there  was  conduct   which  the  Court  of  Chancery  regarded  as   unconscientious that it  interfered with freedom of   contract.  The  lending  money,  on  mortgage  or   otherwise,  was looked on with  suspicion,  and the  court  was  on  the  alert  to  discover  want  of   conscience in the terms imposed by lenders.’

[15.] The reason then justifying the Court’s power to   relieve a mortgagor from the effects of his bargain   is its want of conscience. Putting it in more familiar   language  the  Court’s  jurisdiction  to  relieve  a   mortgagor from his bargain depends on whether it   was obtained by taking advantage of any difficulty   or embarrassment that he might have been in when   he borrowed the moneys on the mortgage. Was the   mortgagor oppressed? Was he imposed upon? If he   was, then he may be entitled to relief.

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[16.]  We then have to  see if  there was  anything  unconscionable in the agreement that the mortgage   would not be redeemed for eighty-five years. Is it   oppressive? Was he forced to agree to it because of   his difficulties? Now this question is essentially one   of fact and has to be decided on the circumstances   of  each  case.  It  would  be  wholly  unprofitable  in   enquiring into  this  question to  examine the large   number of reported cases on the subject, for each   turns on its own facts.

The section is unqualified in its terms, and contains   no saving provision as other sections do in favour of   contracts to the contrary. Their Lordships therefore   see  no  sufficient  reason for  withholding  from the   words of the section their full force and effect.’

[17.] First then, does the length of the term — and   in this case it is long enough being eighty-five years   itself  lead  to  the  conclusion  that  it  was  an   oppressive term? In our view, it does not do so. It is   not necessary for us to go so far as to say that the   length of the term of the mortgage can never by  itself show that the bargain was oppressive. We do   not desire to say anything on that question in this   case.  We  think  it  enough  to  say  that  we  have   nothing here to show that the length of the term   was in any way disadvantageous to the mortgagor.   It is quite conceivable that it was to his advantage.   The  suit  for  redemption  was  brought  over  forty- seven  years  after  the  date  of  the  mortgage.  It   seems  to  us  impossible  that  if  the  term  was   oppressive, that was not realised much earlier and   the  suit  brought  within  a  short  time  of  the  mortgage.  The  learned  Judicial  Commissioner  felt   that the respondents’ contention that the suit had   been brought as the price of landed property had   gone  up after  the  war,  was  justified.  We are  not   prepared to say that he was wrong in this view. We   cannot also ignore, as appears from a large number   of reported decisions,  that  it  is  not  uncommon in   various parts of India to have long-term mortgages.   Then we find  that  the  property  was  subject  to  a  

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prior mortgage. We are not aware what the term of   that mortgage was. But we find that that mortgage   included another property which became free from  it  as a result  of  the mortgage in suit.  This would   show that the mortgagee under this mortgage was   not  putting  any  pressure  on  the  mortgagor.  That   conclusion also receives support from the fact that   the mortgage money under the present mortgage  was more than that under the earlier mortgage but   the  mortgagee  in  the  present  case  was  satisfied   with a smaller security. Again, no complaint is made   that  the  interest  charged,  which  was  to  be  measured by the rent of the property, was in any   manner high. All  these, to our mind, indicate that   the mortgagee had not taken any unfair advantage   of his position as the lender, nor that the mortgagor   was under any financial embarrassment.

[18.] It is said that the mortgage instrument itself   indicates  that  the  bargain  is  hard,  for,  while  the   mortgagor cannot redeem for eighty-five years, the   mortgagee is free to demand payment of his dues   at  any  time  he  likes.  This  contention  is  plainly   fallacious.  There  is  nothing  in  the  mortgage   instrument  permitting  the  mortgagee  to  demand  any  money,  and  it  is  well  settled  that  the   mortgagee’s right to enforce the mortgage and the   mortgagor’s right to redeem are coextensive.”

8. On  the  contrary,  learned  counsel  for  the   respondent submitted that in Panchanan Sharma v.   Basudeo Prasad Jaganani, 1995 Supp (2) SCC 574 it   was clearly held that when there is no stipulation   regarding period of limitation it can be redeemed at   any time. It was, inter alia, held as follows: (SCC p.   576, para 3)

“The  sale  certificate,  Ext.  C-II  does  not  bind  the   appellant  and,  therefore,  the  mortgage  does  not   stand  extinguished  by  reason  of  the  sale.  It  is   inoperative as against the appellant.”

9. Though  the  decision  in  State  of  Punjab  case   prima facie supports the stand of the appellant, the  

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decision rendered by a  three-Judge Bench of  this   Court in Ganga Dhar case according to us had dealt   with the legal position deliberately and stated the  same succinctly.”

(iv) In Parichhan Mistry (Dead) by L.Rs. & Anr. vs. Acchiabar  

Mistry & Ors., (1996) 5 SCC 526, it was observed:-

“2. The High Court came to the conclusion that the   mortgagors  having  failed  to  pay  a  portion  of  the   rent for realisation of which the landlord had filed a   suit  and obtained a  decree  and that  said  decree   being put to execution and the mortgagee having   paid up the decretal dues, the mortgagor loses his   right  of  redemption  and,  therefore  the  suit  for   redemption must fail.  The  learned Judge came to  the conclusion that the equity of redemption, in the   facts  and  circumstances  of  the  case  was   extinguished and,  therefore,  the mortgagor is  not   entitled to redeem. The short question that arises   for  consideration  is  whether  in  the  facts  and  circumstances of the case the High Court was right   in coming to a conclusion that right of redemption   got extinguished and the mortgagor had no right of   redemption.  It  is  true  that  a  right  of  redemption   under a mortgage deed can come to an end, but   only  in  a  manner  known  to  law.  Such  extinguishment of right can take place by contract   between the parties or by a decree of the court or   by  a  statutory  provision  which  debars  the  mortgagors  from  redeeming  the  mortgage.  The  mortgagor’s right of redemption is exercised by the   payment or tender to the mortgagee at the proper   time  and  at  the  proper  place,  of  the  mortgage   money.  When it  is  extinguished by the act of the  parties the act must take the shape and observe   the  formalities  which  the  law  prescribes.  The   expression  “act  of  parties”  refers  to  some  transaction  subsequent  to  the  mortgage  and   standing  apart  from  the  mortgage  transaction.  A   usufructuary mortgagee cannot by mere assertion   of his own or by a unilateral act on his part, convert  

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his position on moiety of the property as mortgagee  into that of an absolute owner. It is no doubt true   that the mortgagee would be entitled to purchase   the entire equity of redemption from the mortgagor.   The  mortgagee  occupies  a  peculiar  position  and,   therefore, the question as to what he purchases at   a court sale is  a vexed question,  but being in an   advantageous  position  where  the  mortgagee  availing himself of his position gains an advantage   he holds, such advantage is for the benefit of the   mortgagor. It has been so held by this Court in the   case  of  Sidhakamal  Nayan  Ramanuj  Das  v.  Bira   Nayak,AIR  1954  SC  336  and  Mritunjoy  Pani  v.   Narmanda  Bala  Sasmal,  (1962)  1  SCR  290.  This   being  the  position  of  law  if  for  some  default  in   payment of rent a rent decree is obtained and the   mortgagee  pays  off  the  same  even  then  the  mortgage in question is  liable to be redeemed at   the option of the mortgagor. The mortgagee cannot   escape from his obligation by bringing the equity of   redemption to sale in execution of a decree on the   personal  covenant.  By  virtue  of  purchase  of  the   property by the mortgagee in court sale, no merger   takes  place  between  the  two  rights  nor  the   mortgage stands extinguished.”

(v) In Achaldas Durgaji Oswal (Dead) Thr. L.Rs.  vs. Ramvilas  

Gangabisan Heda (Dead) Thr. L.Rs. & Ors., (2003) 3 SCC 614,  

this Court upheld the view that right of redemption was not lost  

despite failure of a mortgagor in a usufructuary mortgage to make  

deposit  in  terms  of  a  preliminary  decree  for  redemption.  It  was  

observed:-

“7. Mr Mohta, learned Senior Counsel appearing on  behalf of the respondents on the other hand, would   submit that whereas Order 34 Rule 7 would apply   both  in  respect  of  the  suit  for  foreclosure  and  redemption of mortgage, Order 34 Rule 8 thereof  

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refers to final decree in redemption suit only. The   learned counsel would contend that having regard   to  the  well-established  rule  “once  a  mortgage  always  a  mortgage”,  the  right  of  a  mortgagor  to   redeem the  mortgage  would  continue  unless  the   same is extinguished either by reason of a decree   passed by a  court  of  law or  by an agreement  of   parties. The learned counsel pointed out that in this   case the application for drawing up of a final decree   was filed within a period of  three years from the   date of making the deposit and thus the same was   not barred by limitation.

Findings

8. Usufructuary  mortgage  is  defined  in  Section   58(d) of the Transfer of Property Act in the following   terms:

“58. (d) Where the mortgagor delivers possession or   expressly or by implication binds himself to deliver   possession  of  the  mortgaged  property  to  the   mortgagee,  and  authorises  him  to  retain  such   possession until  payment of the mortgage-money,   and to receive the rents and profits accruing from  the property or any part of such rents and profits   and to appropriate the same in lieu of interest, or in   payment of the mortgage-money, or partly in lieu of   interest  or  partly  in  payment  of  the  mortgage- money,  the  transaction  is  called  an  usufructuary   mortgage  and  the  mortgagee  an  usufructuary   mortgagee.”

9. Mortgagor,  despite  having  mortgaged  the  property  might  still  deal  with  it  in  any  way  consistent with the rights of the mortgagee. He has   an equitable right to redeem the property after the   day fixed for payment has gone by but his right or   equity  of  redemption  is  no  longer  strictly  an   equitable estate or interest although it is still in the   nature  of  an  equitable  interest.  (See  Halsbury’s   Laws of England, 4th Edn., Vol. 32, p. 264.)

10. The  right  of  the  mortgagor,  it  is  now  well  

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settled, to deal with the mortgaged property as well   as the limitation to which it is subject depends upon   the nature of this ownership which is not absolute,   but  qualified  by  reason  of  the  right  of  the   mortgagee  to  recover  his  money  out  of  the  proceedings. The right to redeem the mortgage is a   very  valuable  right  possessed  by  the  mortgagor.   Such  a  right  to  redeem  the  mortgage  can  be   exercised  before  it  is  foreclosed  or  the  estate  is   sold.  The  equitable  right  of  redemption  is   dependent on the mortgagor giving the mortgagee  reasonable notice of his intention to redeem and on   his  fully  performing  his  obligations  under  the   mortgage.

11. The  doctrine  of  redemption  of  mortgaged  property was not recognised by the Indian courts as   the essence of the doctrine of equity of redemption   was unknown to the ancient law of India. The Privy   Council in Thumbasawmy Mudelly v. Mohd. Hossain   Rowthen  called  upon  the  legislature  to  make  a   suitable  amendment  which  was  given  a  statutory   recognition by reason of Section 60 of the Transfer   of Property Act which reads thus:

“60.  Right  of  mortgagor  to  redeem.—At any time  after  the  principal  money  has  become  due,  the   mortgagor has a right, on payment or tender, at a   proper time and place, of the mortgage-money, to   require  the  mortgagee  (a)  to  deliver  to  the   mortgagor  the  mortgage-deed  and  all  documents   relating to the mortgaged property which are in the   possession or  power of the mortgagee,  (b)  where  the mortgagee is  in  possession of  the mortgaged   property,  to  deliver  possession  thereof  to  the   mortgagor,  and  (c)  at  the  cost  of  the  mortgagor   either to retransfer the mortgaged property to him  or  to  such  third  person  as  he  may  direct,  or  to   execute  and  (where  the  mortgage  has  been  effected  by  a  registered  instrument)  to  have  registered an acknowledgement in writing that any   right in derogation of his interest transferred to the   mortgagee has been extinguished:

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Provided that the right conferred by this section has   not been extinguished by act of the parties or by   decree of a court.

The right conferred by this section is called a right   to redeem and a suit to enforce it is called a suit for   redemption.

Nothing in this section shall  be deemed to render   invalid any provision to the effect that, if the time   fixed for payment of the principal money has been  allowed to pass or no such time has been fixed, the   mortgagee  shall  be  entitled  to  reasonable  notice   before payment or tender of such money.”

12. A  right  of  redemption,  thus,  was  statutorily   recognized as a right of a mortgagor as an incident   of mortgage which subsists so long as the mortgage   itself subsists. The proviso appended to Section 60,   as noticed hereinbefore, however, confines the said   right so long as the same is not extinguished by an   act of the parties or by a decree of court.

13. In  the  Law  of  Mortgage  by  Dr  Rashbehary   Ghose at  pp.  231-32  under  the  heading  “Once a   mortgage, always a mortgage”, it is noticed:

“In  1681  Lord  Nottingham in  the  leading  case of   Howard  v.  Harris4 firmly  laid  down  the  principle:   ‘Once a  mortgage,  always a  mortgage’.  This  is  a   doctrine  to  protect  the  mortgagor’s  right  of   redemption:  it  renders  all  agreements  in  a   mortgage for forfeiture of the right to redeem and  also encumbrances of or dealings with the property   by the mortgagee as against a mortgagor coming to   redeem.  In  1902  the  well-known  maxim,  ‘once  a   mortgage, always a mortgage’, was supplemented  by the words ‘and nothing but a mortgage’ added   by  Lord  Davey  in  the  leading  case  of  Noakes  v.   Rice5 in which the maxim was explained to mean  ‘that a mortgage cannot be made irredeemable and   a provision to that effect is void’.  The maxim has   been  supplemented  in  the  Indian  context  by  the   words ‘and therefore always redeemable’, added by

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Justice Sarkar of the Supreme Court in the case of   Seth Ganga Dhar v. Shankar Lal.

It  is  thus  evident  that  the  very  conception  of   mortgage  involves  three  principles.  First,  there  is   the maxim: ‘once a mortgage, always a mortgage’.   That  is  to  say,  a  mortgage is  always redeemable   and if a contrary provision is made, it is invalid. And   this  is  an  exception  to  the  aphorism,  modus  et   conventio  vincunt  legem  (custom and  agreement   overrule  law).  Secondly,  the  mortgagee  cannot   reserve to himself any collateral advantage outside   the  mortgage  agreement.  Thirdly,  as  a  corollary   from the  first  another  principle  may be deduced,   namely, ‘once a mortgage, always a mortgage, and   nothing  but  a  mortgage’.  In  other  words,  any  stipulation which prevents a mortgagor from getting   back  the  property  mortgaged  is  void.  That  is,  a   mortgage is always redeemable.

The maxim ‘once a mortgage always a mortgage’   may  be  said  to  be  a  logical  corollary  from  the   doctrine, which is the very foundation of the law of   mortgages, that time is not of the essence of the   contract  in  such  transactions;  for  the  protection   which the law throws around the mortgagor might   be rendered wholly illusory, if the right to redeem  could be limited by contract between the parties.   Right  to  redeem  is  an  incident  of  a  subsisting   mortgage  and  is  inseparable  from it  so  that  the   right  is  coextensive with the mortgage itself.  The   right subsists until it is appropriately and effectively  extinguished  either  by  the  acts  of  the  parties   concerned or by a proper decree of the competent   court.”

4. In The Law of Mortgages by Edward F. Cousins at   p.  294,  in  relation  to  protection  of  the  right  to   redeem, it is stated:

“But  the  protection  of  embarrassed  mortgagors   could not be achieved by the mere creation of the   equitable  right  of  redemption.  As  soon  as  the  practice  in  equity  to  allow  redemption  after  the  

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contract date became known, mortgagees sought to   defeat  the  intervention  of  equity  by  special   provisions in the mortgage-deed. These provisions   were  designed either  to  render  the  legal  right  to   redeem  illusory,  and  thus  prevent  the  equity  of   redemption from arising at all, or to defeat or clog   the  equity  of  redemption  after  it  had  arisen.  For   example, the mortgage contract might provide for   an  option  for  the  mortgagee  to  purchase  the   mortgaged property, thus defeating both the legal   and  equitable  right  to  redeem,  or  might  allow   redemption  after  the  contract  date  only  upon   payment of an additional sum or upon performance   of  some  additional  obligation.  Consequently,  the  Chancellor  began  to  relieve  mortgagors  against   such  restrictions  and  fetters  on  the  legal  and   equitable  rights  to  redeem  imposed  by  special   covenants in the mortgage.

The protection of a mortgagor against all attempts   to defeat or clog his right of redemption involved  the  creation  of  subsidiary  rules  of  equity,   invalidating  the  various  contrivances  which  ingenious  conveyancers  devised.  These  rules  are   sometimes summed up in a maxim of equity ‘once   a mortgage always a mortgage’.  This  means that   once  a  contract  is  seen  to  be  a  mortgage  no   provision  in  the  contract  will  be  valid  if  it  is   inconsistent  with  the  right  of  the  mortgagor  to   recover his security on discharging his obligations.   Provisions offending against the maxim may either   touch  the  contractual  terms  of  redemption,   rendering the right to redeem illusory, or they may   touch only the equitable right to redeem after the   passing  of  the  contract  date,  hampering  the   exercise of the right.  Provisions of the latter kind   are  termed  ‘clogs’  on  the  equity  of  redemption.   Greene,  M.R.  in  Knightsbridge  Estates  v.  Byrne7  emphasized  that  provisions  touching  the  contractual right to redeem are not properly to be  classed as clogs on the equity of redemption. But it   is  evident  that  such  provisions  are  in  substance   clogs on the equity of redemption, since they tend

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to defeat it altogether.”

15. In Fisher and Lightwood’s Law of Mortgage, the   nature of the right of redemption is stated thus:

“The rights of redemption.— The right to redeem a   mortgage was formerly conferred on the mortgagor   by a  proviso or  condition in  the mortgage to the   effect that,  if  the mortgagor or  his representative   should pay to the mortgagee the principal sum, with   interest  at  the  rate  fixed,  on  a  certain  day,  the   mortgagee, or the person in whom the estate was   vested, would, at the cost of the person redeeming,   reconvey to him or as  he should direct (a). This is   still the practice in the case of a mortgage effected   by an assignment of the mortgagor’s interest (b). A   proviso for reconveyance was no longer appropriate   after 1925 for a legal mortgage of land [which has   to be made by demise (c)], and it is not necessary   to have a proviso for surrender of the term in such a   mortgage, since the term ceases on repayment (d).   Nevertheless,  in  order  to  define the  rights  of  the   mortgagor and the mortgagee, a proviso is inserted   expressly  stating  that  the  term will  cease  at  the   date fixed (e).

It has been seen (f) that, at law, whatever form the   mortgage  took,  upon  non-payment  by  the  appointed  time,  the  estate  of  the  mortgagee   became absolute and irredeemable, but that equity   intervened to enable the mortgagor to redeem after   the date of repayment.

There  are,  therefore,  two  distinct  rights  of   redemption  —  the  legal  or  contractual  right  to   redeem  on  the  appointed  day  and  the  equitable   right to redeem thereafter (g). The equitable right   to redeem, which only arises after the contractual   date  of  redemption  has  passed,  must  be  distinguished from the equity of redemption, which   arises when the mortgage is made (g).”

16. The question which falls for consideration in this   appeal  must  be  considered  keeping  in  view  the   statutory right of the mortgagor in terms of Section  

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60  of  the  Transfer  of  Property  Act.  By  reason  of   Article 61 of the Limitation Act, 1963, the limitation   provided  for  a  suit  to  redeem  or  recover  the   possession of immovable property mortgaged by a   mortgagor is thirty years from the date of accrual of   right to redeem or recover possession. Article 137   which is a residuary provision provides for limitation   of  three  years  in  a  case  where  no  period  of   limitation is provided.

20. The  statutory  provisions,  as  noticed   hereinbefore, are required to be construed having  regard to  the  redeeming features  of  usufructuary   mortgage,  namely,  (a)  there  is  a  delivery  of   possession  to  the  mortgagee,  (b)  he  is  to  retain   possession until repayment of money and to receive   rents and profits or part thereof in lieu of interest,   or in payment of mortgage-money, or partly in lieu   of  interest  and  partly  in  payment  of  mortgage- money,  (c)  there is  redemption when the amount   due is personally paid or is discharged by rents or   profits received, and (d) there is no remedy by sale   or foreclosure.

21. Order 34 Rules 7 and 8 do not confer any right   upon the usufructuary mortgagee to apply for final   decree  which  is  conferred  on  the  mortgagee  on   other types of mortgages. By reason of sub-rule (1)   of  Rule 8 of  Order  34,  a  mortgagor is  entitled to   make  an  application  for  final  decree at  any  time  before a final decree debarring the plaintiff from all   rights to redeem the mortgaged property has been   passed or before the confirmation of a sale held in   pursuance of a final decree passed under sub-rule   (3)  of  this  Rule.  No  such  application  is  again   contemplated  at  the  instance  of  the  usufructuary   mortgagee. By reason of sub-rule (1) of Rule 8 of   Order 34, a right of redemption is conferred upon  the mortgagor of a usufructuary mortgage. Such a   provision has been made evidently having regard to   the right of redemption of a mortgagor in terms of   Section  60  of  the  Transfer  of  Property  Act  and   further,  having  regard  to  the  fact  that  a   usufructuary  mortgagee  would  be  entitled  to  

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possess the property in question till a final decree of   redemption is passed.

22. The right of redemption of a mortgagor being a   statutory right, the same can be taken away only in   terms of the proviso appended to Section 60 of the  Act which is extinguished either by a decree or by  act of parties.  Admittedly,  in the instant case,  no  decree has been passed extinguishing the right of   the mortgagor nor has such right come to an end by   act of the parties.

23. A right for obtaining a final decree for sale or   foreclosure  can  be exercised only  on  payment  of   such money. Such a right can be exercised at any   time even before the sale is confirmed although the   final  decree  might  have  been  passed  in  the   meanwhile.  The mortgagee is  also not  entitled to   receive any payment under the preliminary decree   nor  is  the  mortgagor  required  to  make  an  application to recover before paying the same.

24. Even, indisputably,  despite expiry of the time   for deposit of the mortgaged money in terms of the   preliminary  decree,  a  second  suit  for  redemption   would be maintainable.”

(vi) In  Prithi Nath Singh vs.  Suraj Ahir, (1963) 3 SCR 302, this  

Court approved the observations of Allahabad High Court in Rama  

Prasad vs. Bishambhar Singh, AIR 1946 All 400, that Sections 60  

and  62  of  T.P.  Act  make  distinction  in  right  of  a  usufructuary  

mortgagor and other mortgagor as follows:-

“11. In Ramprasad v. Bishambhar Singh, AIR 1946  All 400, the question formulated for determination   was  whether  the  suit  being  a  suit  to  recover   possession  of  the  mortgaged  property  after  the   mortgage  money  had  been  paid-off  was  a  suit   “against the mortgagee to redeem” or “to recover   possession  of  immovable  property  mortgaged”.  

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Braund, J., said, at p. 402: “Now, it is quite obvious that that section (Section   60 of the Transfer of Property Act) can only refer to   a  case  in  which  a  mortgagor  under  a  subsisting   mortgage  approaches  the  Court  to  establish  his   right  to  redeem  and  to  have  that  redemption  carried  out  by  the  process  of  the  various   declarations  and  orders  of  the  Court  by  which  it   effects  redemption.  In  other  words,  Section  60   contemplates a case in which the mortgage is still   subsisting and the mortgagor goes to the Court to   obtain the return of his property on repayment of   what is still due. Section 62, on the other hand, is in   marked contrast to Section 60. Section 62 says that   in  the  case  of  a  usufructuary  mortgage  the   mortgagor  has  a  right  to  “recover  possession”  of   the  property  when  (in  a  case  in  which  the   mortgagee  is  authorised  to  pay  himself  the   mortgage money out of the rents and profits of the   property) the principal money is paid-off. As we see   it,  that is  not a case of redemption at all.  At the   moment  when  the  rents  and  profits  of  the   mortgaged  property  sufficed  to  discharge  the   principal  secured by  the mortgage,  the  mortgage  came to an end and the correlative right arose in   the  mortgagor  “to  recover  possession  of  the   property”. The framers of the Transfer of Property   Act have clearly recognised the distinction between   the procedure which follows a mortgagor's desire to   redeem a subsisting mortgage and the procedure   which  follows  the  arising  of  a  usufructuary   mortgagor's right to get his property back after the   principal has been paid-off.”

(vii) In Hamzabi  & Ors. vs. Syed Karimuddin & Ors., (2001) 1  

SCC 414, it was observed:-

“2. The right of the mortgagor to redeem had its   origin  as  an  equitable  principle  for  giving  relief   against  forfeiture  even  after  the  mortgagor   defaulted in making payment under the mortgage  deed. It is a right which has been jealously guarded  

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over  the  years  by  courts.  The maxim of  “once a   mortgage always a mortgage” and the avoidance of   provisions  obstructing  redemption  as  “clogs  on   redemption”  are  expressions  of  this  judicial   protection.  (See:  Pomal  Kanji  Govindji  v.  Vrajlal   Karsandas  Purohit  (1989)  1  SCC  458  in  this   context.)  As far  as this  country is  concerned,  the   right is statutorily recognised in Section 60 of the   Transfer  of  Property  Act.  The  section  gives  the  mortgagor right to redeem the property at any time  after  the  principal  money  has  become  due  by  tendering  the  mortgage  money  and  claiming  possession  of  the  mortgaged  property  from  the  mortgagee. The only limit to this right is contained   in the proviso to the section which reads:

“Provided that  the right  conferred by this  section   has not been extinguished by act of the parties or   by decree of a court.”

3. While the expression “decree of court” is explicit   enough, the phrase “act of parties” has given rise to   controversy.  One  such  act  may  be  when  the  mortgagor  sells  the  equity  of  redemption  to  the   mortgagee.  This  Court  in  Narandas  Karsondas  v.   S.A. Kamtam, (1977)  3 SCC 247 has said that: (SCC   p. 254, para 34)”

(viii) Contrary  view  has  been  expressed  in  Sampuran Singh &  

Ors.  vs. Smt. Niranjan Kaur(smt.) & Ors., (1999) 2 SCC 679 as  

follows:-

“14. Submission  was,  as  aforesaid,  that  right  to   redeem only accrues when either  the mortgagors   tender the amount of mortgage or the mortgagees  communicate satisfaction of the mortgage amount   through the usufruct from the land. This submission   is misconceived, as aforesaid, if this interpretation   is  accepted,  then  till  this  happens  the  period  of   limitation never start running and it could go on for   an infinite period. We have no hesitation to reject  

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this  submission.  The  language  recorded  above  makes it clear that right of redemption accrues from  the  very  first  day  unless  restricted  under  the   mortgage  deed.  When  there  is  no  restriction  the   mortgagors have a right to redeem the mortgage  from  that  very  date  when  the  mortgage  was   executed.  Right  accruing  means,  right  either   existing or coming into play thereafter.  Where no   period in the mortgage is specified, there exists a   right  to  a mortgagor to  redeem the mortgage by   paying  the  amount  that  very  day  in  case  he   receives  the  desired  money  for  which  he  has   mortgaged his land or any day thereafter. This right   could only be restricted through law or in terms of a   valid  mortgage deed.  There is  no such restriction   shown  or  pointed  out.  Hence,  in  our  considered   opinion the period of limitation would start from the   very date the valid mortgage is said to have been   executed and hence the period of limitation of 60  years  would  start  from  the  very  date  of  oral   mortgage, that would be from March 1893. In view  of this, we do not find any error in the decision of   the first appellate court or the High Court holding   that  the  suit  of  the  present  appellants  is  time- barred.”

However, facts mentioned in para 3 show that possession remained  

with mortgagor and it was not a case of usufructuary mortgage.

14. We need not multiply reference to other judgments.  Reference  

to  above  judgments  clearly  spell  out  the  reasons  for  conflicting  

views.  In cases where distinction in usufructuary mortgagor’s right  

under Section 62 of the T.P. Act has been noted, right to redeem has  

been held to continue till  the mortgage money is  paid for  which  

there is no time limit while in other cases right to redeem has been  

held to accrue on the date of mortgage resulting in extinguishment

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of right of redemption after 30 years.

15. We,  thus,  hold  that  special  right  of  usufructuary  mortgagor  

under Section 62 of the T.P. Act to recover possession commences in  

the manner specified therein,  i.e.,  when mortgage money is paid  

out of rents and profits or partly out of rents and profits and partly  

by payment or deposit by mortgagor.  Until then, limitation does not  

start for purposes of Article 61 of the Schedule to the Limitation Act.  

A usufructuary mortgagee is not entitled to file a suit for declaration  

that he had become an owner merely on the expiry of 30 years from  

the date of the mortgage.  We answer the question accordingly.  

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16. On this conclusion, the view taken by the Punjab and Haryana  

High  Court  will  stand  affirmed  and  contrary  view  taken  by  the  

Himachal  Pradesh  High  Court  in  Bhandaru  Ram (D)  Thr.  L.R.  

Ratan Lal vs. Sukh Ram (supra) will stand over-ruled.

17.  The appeals are dismissed.  

     .............................................J.                                [ T.S. THAKUR ]

 ............................................J.    [ C. NAGAPPAN ]

 ...........................................J.     [ ADARSH KUMAR GOEL ]

New Delhi August 21, 2014